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Connecting the world: the future of blockchain

Connecting the world: the future of blockchain

By Marcus Lawrence.Dec 05, 2018, 8:36AM

SITA Labs Lead Engineer Kevin O’Sullivan outlines the potential impact blockchain technology is set to have over the coming years.

The excitement surrounding blockchain, and the benefits its development and integration could have for myriad industries, has been palpable in recent years. Originally an anchor for cryptocurrencies, blockchain’s transparency and traceability – combined with the collaborative possibilities that its inherent distribution entails – have brought it to the forefront of tech research in many sectors, not least the transport industry.

SITA is a multinational IT giant focused on the air transport industry, and in its 2018 IT Air Transport IT Insights report, the company found that blockchain attracted the most research attention this year of any technology among airline and airport CIOs. The report found that 59% of airlines and 34% of airports plan to implement blockchain technology research programs by 2021.

Kevin O’Sullivan, Lead Engineer for research and development arm SITA Lab, has been leading blockchain technology research for airports and airlines over the past two and a half years. O’Sullivan, whose experience encompasses 25 years in the travel technology space, was keen to discuss blockchain’s development, what it will achieve for businesses around the world, and what the future holds for the disruptive technology.

At present, blockchain remains in its infancy. “I see a strong parallel between what we saw in the 90s, when the internet came along, and there was also huge hype. Everyone was predicting this was going to change the world, but nobody really knew how,” O’Sullivan says. “I feel like that’s where we are with blockchain. I think the technology itself is relatively straightforward – it’s well described, there’s no mystery about it. But the real issues now are to figure out how it will work from a business perspective and a governance perspective.”

Naturally, such a radical and disruptive new technology draws huge questions about integration, governance, compliance and access. Can this technology step into a business’ processes with minimal disruption? With an open, collaborative platform, who is in charge? Who conducts its maintenance? Who has access to what data, and who makes that decision? “Blockchain is a collaboration technology, and there’s a promise that, by encouraging partners, suppliers and competitors to all collaborate effectively on the same technology, infrastructure, and data, we can eliminate friction in how we do business and improve trust across different stakeholders,” O’Sullivan says. “But it introduces significant problems from a regulation point of view because the legal primers of what a government expects companies to do from a compliance and auditing perspective doesn’t work across blockchain.”

With the promises of what blockchain can offer, tackling these complex issues is certainly worth the expense and headaches. Aside from what blockchain can do for airline and airport stakeholders, passengers themselves could stand to enjoy a far more streamlined experience. Self-sovereign identity, a new form of digital identity, blends cryptology (writing and solving code) with anchor points on a blockchain to essentially provide a digital copy of an individual’s passport, boarding pass and more. “The immigration officer can, without having to refer back to the issuing government, have that peer-to-peer connection,” O’Sullivan explains. “They can verify the digital data hasn’t been tampered with, verify who it was issued by, and verify it was issued to that particular passenger.”

SITA Lab is currently working on trials whereby passengers can cross border control, undergo biometric checks, and effectively leave the airport without any disruption. “From a government perspective, they’ll get advanced information about that passenger,” O’Sullivan says. “They kind of do already, but right now it still has to go through an airline processing system whereas this shifts responsibility over to the passenger. This means the governments get the data they want, and they can verify that it’s come directly from another government, and they get it sooner than they currently would.”

For O’Sullivan, however, this does not represent the biggest opportunity that blockchain offers. Data noise causes issues in every sector: for every piece of information, a variant will exist for each relevant stakeholder. Maintaining truth across each of these copies is extremely difficult, O’Sullivan says, but with blockchain serving as a single source of truth the issue is eliminated. “This is an incredibly collaborative industry. Flights take off from one airport, go to another, you’re dealing with immigration, cargo, ground handlers, and everybody’s got to work together. At the moment, there are too many points of friction.”

The impact caused by the inefficient communication of the truth manifests as delays for passengers and increased, unnecessary costs for airlines. By providing stakeholders with verifiable, trustworthy information that has the promise of universality, airport and airline operations could be made considerably more efficient, mitigating costs, building strong brand images, and making the passenger experience far smoother.

Answering the question of governance when building this single source of truth – deciding who gets to see what and why, and who makes these decisions – is first met by the issue of private vs public. A public blockchain ledger that is truly decentralised and freely distributed is necessary for cryptocurrencies, but this public freedom of information is not appropriate for the aerospace industry. Instead, the blockchain technology under development at SITA Lab operates under private permissions. O’Sullivan adds, however, that the tech’s immaturity means that this in itself does not solve the issue of governance.

O’Sullivan says that figuring out who is responsible for the blockchain, who maintains it and who ultimately owns it are questions being answered by collaboration across the industry. “You have this incredibly valuable dataset of the true information about a flight, and the question of who owns that data. That needs to be decided as well. Collaboratively, we need to come to an agreement on how we manage that.”

Once these issues are resolved, blockchain offers a shakeup of the B2B space that O’Sullivan says could rival the revolution of B2C engagement driven by the rise of the internet. “I think there’s huge potential on the B2B engagement model. For businesses there’s been quite a bit of friction when two businesses begin an engagement between them in terms of due diligence to each other, and accounting, legal frameworks, and all that sort of stuff. I think there’s potential to make that a lot more frictionless, a lot more seamless, and therefore a lot easier to chop and change.”

Ultimately, the technology still has a long way to go, particularly as the dust begins to settle around the hype and challenges begin to present themselves in earnest. “I think we’re going to be a little more circumspect about blockchain in 2019, and then, hopefully, see some realistic things happen in 2020,” O’Sullivan says. “We still need blockchain to prove itself. We’re definitely coming to the end of the honeymoon period, and entering the more realistic period.”

Digital solutions giant Accenture and insurance firm Generali have launched the first blockchain-based solution for the employee benefits (EB) industry to mitigate processing errors in the reinsurance process through smart contracts and automatic reconciliation.